Advice please!

jamesd

Richard_Newlove wrote: »

she'd only be paying tax on the remaining £8k. If her allowance is £11k, the tax would be negligible?

Depends on her other taxable income during the year. The 3k is part of it and there would also hopefully be some benefit income to allow for.

Richard_Newlove wrote: »

If she receives the full amount (which I assume is the PCLS?), then what would the balance be?

PCLS is the pension commencement Lump Sum which means the up to 25% tax free portion, not any part of the remaining 75%.

The PCLS phrasing is used formally because there are other types of lump sum but usually people just write tax free lump sum if the context made it clear what was being discussed was the PCLS.

jamesd

Richard_Newlove wrote: »

Although it would be great if she could continue to make pension contributions, we simply don't have the funds available do that.

She can take some of the money from the work pension and use that to pay 2880 into a pension then about six weeks later take out the 3600 including the 25% that was added to give her basic rate tax relief. A person is entitled to this tax relief even if they paid no income tax.

Some money was probably paid into the work pension this tax year. She should reduce the 2880 by that amount.

A person aged from 55 and younger than 75 can do this each tax year.

So it's not so much affording it overall but whether you can afford to wait a few weeks to get the extra money you can make on some of the work pot.